Esmark announces management changes

August 28, 2013

YORKVILLE - Exactly what a sudden shift in top personnel at Esmark Steel's Ohio mill operation in Yorkville means in the long-term for the facility, now idled more than a year, is unclear, but it is clear the change has stalled the outward appearance of moving toward an anticipated near-term startup as has been touted to this point by Esmark's head Jim Bouchard.

During a telephone interview with The Times Leader on Tuesday afternoon, Jim Bouchard confirmed that the three top personnel changes specific to Esmark's "Ohio mills operations" implemented yesterday would be considered as part of the purchase if he moves to accept any of the several options recently extended to the company suggesting potential purchases of "mill assets."

It is known the facility in Yorkville has well-established abilities to move large quantities of water from resources below the Ohio River, which could be valuable to the developing gas and oil industry in the region. It functions as a loading and off-loading facility for truck, rail and river; and there are extensive sections of unused acreage that were part of the original sale of properties to Esmark via RG Steel's bankruptcy case.

Bouchard declined to offer any specifics concerning the potential new options he has to consider other than to say he has decisions to make on three fronts, and they need to be made by the end of September.

Those choices include: "firing up the mill, deciding not to fire it up, and do I decide to sell to one of the potential suitors."

These changes came at local steel union officials without warning, as they had been under the impression there were substantial details about to begin getting addressed in order for the facility to be operational within a few months time.

"This is very disappointing," was the immediate reaction by Jerry Conners, president of the United Steelworkers Union Local 1223 in Yorkville, after learning another major change is on the horizon for the idled mill. "This is a complete turnaround from what had been said by Esmark about plans to start up in the fall."

Will the Yorkville mill that has been idle for more than a year get brought back to life in the coming weeks as had been Esmark Steel Group's confirmed plan, and if it does, will Esmark still have any ownership role?

These key questions appear to be without answers in the wake of Tuesday's announcement by Esmark founder Bouchard of major management shifts being implemented immediately and revealing a number of offers from "potential suitors" for the mill's "assets" are being evaluated and could result in a sale of sorts.

Esmark's top executive also said his timetable for reaching a final decision on the possibilities under consideration is the end of September. Esmark's organizational and operating structure is now said to have been supporting efforts to bring the mill back up to some level of production before a specific window of opportunity for annual global contract negotiations is closed, which arrives at the end of October.

Several times in recent months, an Esmark spokesman has shared responses on behalf of Bouchard that seemed to set and then move timetables.

Esmark Inc., on Tuesday afternoon, announced management changes for its Esmark Steel Group subsidiary to better serve its diverse customer base and streamline service center and mill operations in Chicago and Ohio, respectively. As part of the management realignment, Esmark Inc. Chairman and CEO Bouchard will reassume CEO duties of Esmark Steel Group.

Bouchard said the management restructuring and his renewed role as CEO of Steel Group operations were a strategic response to the changing needs of its OEM customer base and the current dynamics of the steel marketplace.

"We believe our management teams at our service centers in Illinois and cold-rolled mill operations in Ohio need to be better aligned to serve our OEM customers with the right mix of products and services at the right time," he said. "As the steel industry continues to adapt to the current economic environment, we must respond in kind if we're going to remain competitive."

Brian Bergmann, currently vice president of Esmark Inc. and a seasoned steel industry executive, has been named vice president and chief operating officer for Esmark Steel Group. In addition, Daniel Martin, currently controller for Esmark Steel Group, has been named vice president of Finance for Steel Group operations.

Thomas Modrowski, formerly CEO of Esmark Steel Group, has been named chief operating officer of its Ohio mill operations, which includes Ohio Cold Rolling Company in Yorkville. John Krupinski, currently CFO of Esmark Steel Group, assumes the same title for Ohio mill operations. Thomas Mihelcic, vice president of purchasing for Esmark's recently divested CSI Bars Division, has been named general manager of commercial sales for Ohio Mill operations. Michael Ogrizovich and Scott Sternheimer, currently president and vice president of commercial, respectively, of Esmark Steel Group, will remain in their capacities. All management changes are effective immediately.

Bouchard added that all Esmark Steel Group operations and the company's trucking and transportation logistics operations will now be based at Esmark Inc.'s new world headquarters in Sewickley, Pa.

Of the decision whether to restart the Ohio mill operations in Yorkville, "We've received multiple inquiries about the mill assets and several offers from potential suitors, so the evaluation process must be completed before we make the decision to restart the mill, sell the assets or explore other strategic options."

Esmark acquired the former RG Steel Yorkville cold-rolled finishing mill in a bankruptcy, court-supervised auction in August 2012, as well as RG Steel's 50 percent interest in Ohio Coatings Company's tin plate production facility.